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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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  • It is a short term and costly solution. Other than the political roadblock, a pipeline between US and Canada makes most sense.
  • edited May 2012
    Reply to @Sven: Not so sure about that perspective-
    • The rail infrastructure already exists.
    • Rail transport, by it's very nature, is extremely adaptable to new or alternate locations.
    • The only additional major equipment components necessary would be additional tanker cars.

    • The inherent safety factor to monitor and limit spills is much greater. The main problem that I see with pipelines is that due to poor design, maintenance and monitoring once a spill commences, huge quantities of oil are released until someone gets around to shutting off the flow. Even in the event of a train wreck, the spillage would be extremely limited compared to a pipeline incident.

    • I would guess that the energy contained in one oil rail-car is at least equal to the energy contained in one rail carload of coal. Coal is routinely shipped long distances in mass quantities by rail, as an apparently economical proposition.
  • Reply to @Old_Joe:
    Hey Ol'joe the Hobo...good points...in addition, I don't know one song written about a pipeline.
  • edited May 2012
    Hi bee,
    As OJ and I are almost as old as some of the ancient rock formations in Michigan's upper peninsula, I am assured; at least he too recalls this "Pipeline" sound. Pipeline is in reference, in this musical case; to a wave shape related to surfing.
    The Chantay's, 1963: This is not the original group, but a cleaner and almost exact musical performance. The original tape copy of the group is available at YouTube. The Venture's also did a "cover" of this song; which is as well known.
    Back in the day, one of many hundreds of songs that were good, street machine driving tunes on a warm MI summer night......A&W, fries and a red sauce hot dog?.......don't mind if I do.
    Enjoy......well, at least the older one's here.
    Catch

    http://www.dailymotion.com/video/x1m33w_pipeline-the-ventures_music
  • Train car of heating oil 4 billion & 161 million BTU-Coal car 3 billion & 366 million BTU
    I hope the math worked out.. Net would less.
    Have a good day, Derf
  • Reply to @catch22:
    Nice...
  • MJG
    edited May 2012
    Hi Guys,

    Why the worry over oil and gas pipelines now? There are hundreds of thousands of these lines that have crisscrossed the United States in a complex network for decades.

    They have established an unmatched track record as an economical, convenient, and safe way to transport fuel sources for an energy hungry population, particularly when compared to other options.

    The industry is heavily regulated with safety considerations and environmental protection as major goals of that regulation. Generally, the industry has responded favorably to that regulation mandate. The improvements in their safety records are enviable, especially when contrasted to realistic alternative modes for long distance transportation.

    The bottom-line is that pipelines are extremely safe and cheap. They keep costs, contamination, road congestion, and personnel injury rates down. The absolute number of incidents, the size of the spillages, and the deaths coupled to these incidents are all on a positive downward spiral. The companies contributing to this positive incidence-control direction are motivated, like most of us, by the profit incentive. Capitalistic economics works wonders.

    Here are some factoids that I collected from various reliable Internet sources.

    The number of incidents is going down. “Liquid pipeline spills along rights-of-ways have fallen over the past decade, in terms of both the number of spills and the barrels of product spilled per 1,000 miles traveled. The frequency of releases decreased from 2 incidents per thousand miles in1999-2001 to 0.7 incidents per thousand miles in 2006-2008, a decline of 63 percent.”

    Spill reaction time is improving to limit damage per accident. “The amount of barrels released per 1,000 miles decreased from 629 in 1999-2001 to 330 in 2006-2008.”

    As a nation, we have become more safety conscience in the last three decades. “In 1998, the U.S. oil pipeline industry launched an Environmental and Safety Initiative (ESI) to make further improvements in spill and accident prevention.”

    Deaths are rare in the construction and maintenance of pipelines. Most deaths are caused by near-end use failures due to third party digging and age-stressed installations. “Compared to the pipeline record, there are 87 times more oil transport truck-related deaths, 35 times more oil transport truck related fires/explosions and twice as many oil transport truck-related injuries.”

    Several years ago, I traveled hundreds of miles along the Alaskan pipeline. It is non-intrusive to the local landscape. The animals loved it in the summer for shade and in the winter for warmth. Pipelines are also environmentally friendly. “To replace a medium-sized pipeline that transports 150,000 barrels a day would require operating more than 750 trucks or a 75-car train every day.” I find this statistic troublesome for those championing discrete highway or rail solutions from both a congestion and pollution perspective.

    I am surely not a fuel transport authority. In situations where I am in an obvious knowledge and experience deficit, I frequently default to the judgments of qualified engineering in that specialized field. In case after case and along a long historic timeline, these experts choose pipelines as the preferred transportation mechanism. Continuous flow wins over discrete flow in almost every instance. The Romans recognized the wisdom of that tradeoff over 2000 years ago.

    Arguments to the contrary are misdirected. Pipelines have an overarching advantage and are the superior solution in most scenarios given real world needs and constraints.

    Although I favor pipeline over rail when both options are viable, I do not favor the complete elimination of any option. Competition is good for price, progress and continuity, especially given the disruptive terrorist factor.

    Best Regards.
  • "Why the worry over oil and gas pipelines now?"

    ⇒ Here's why...

    And with respect to rail transport vs yet more poorly maintained and operated pipelines:

    ⇒ Rail makes big inroads in oil transport

    ⇒ U.S. probe of Enbridge questions control-room experience, turnover
  • edited May 2012
    Reply to @MJG: And I think infrastructure, with its consistent cash flows, will continue to become a popular asset class. I own Brookfield Infrastructure, which owns Nat Gas pipelines in the Midwest and talked in the last quarter about looking at other Nat Gas infrastructure. (http://www.brookfieldinfrastructure.com/content/transport_and_energy/north_american_gas_transmission_operations-3322.html)

    http://www.businessweek.com/news/2012-05-17/canada-pension-posts-6-dot-6-percent-return-on-real-estate-bonds
    "Real Estate Returns
    Real estate and infrastructure, which represent more than 16 percent of the fund’s investments, both returned about 13 percent in fiscal 2012, outperforming returns from equities, which account for half the fund’s portfolio.

    The pension plan’s bond portfolio, which includes money- market securities, also lifted investment income, returning 9.5 percent last year, up from 5.3 percent in 2011. Canada Pension said non-marketable bonds returned 14 percent last year, more than triple that of 2011, and inflation-linked bonds returned about 16 percent, up from 10 percent.

    Denison said he doesn’t expect to repeat last year’s bond performance in the near future. Canada Pension sold its European sovereign bonds to buy assets including real estate and infrastructure, which it expects will fare better over the medium and long-term.

    “There’s more downside risk to bonds over the next three to five years than there is upside,” Denison said in a telephone interview. “There’s not much room for yields to go down, and that’s the practical reality of where they are today.”


    http://www.capitolweekly.net/article.php?_c=10l2eya079vh7t8&xid=10l2e7f384m9xrk&done=.10l2eya079vq7t8
    "The nation’s largest public pension fund, CalPERS, is holding a meeting in San Diego this week to discuss investments in California infrastructure, this one focusing on energy.

    Previous closed-door meetings with a wide range of interests (held in Sacramento, San Francisco and Los Angeles since March) have looked at transportation, water and infrastructure investing in general.

    In a happy convergence, pension funds are moving into infrastructure to reduce inflation and market risk, while deficit-ridden governments are deep in bond debt and looking for new ways to rebuild and expand crumbling public works."


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